Meeting of the Board of Visitors Finance Committee

September 11, 2014

ACTION ITEMS

A. 2015 Amendments to the 2014- 2016 Biennial Budget

B. Amended 2014-2020 State-Required Six-Year Plan

C. Capital Project Approvals

D. Addition to the 2014-2015 Annual Renovation and Infrastructure Plan

E. Property Transactions

F. Establishment of Quasi-Endowments

G. Approval of Signatory Authority for Medical Center, Procurement of Food and Nutrition Services

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C O L E T T E S H E E H Y

V I C E P R E S I D E N T F O R M A N A G E M E N T A N D B U D G E T

2015 AMENDMENTS TO THE 2014-

2016 BIENNIAL BUDGET

2 0 1 5 G e n e r a l F u n d A m e n d m e n t s t o t h e 2 0 1 4 - 2 0 1 6 B i e n n i a l B u dg e t

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Operating Amendments FY2014-15 Request FY2015-16 Request

Undergraduate Enrollment Growth (GF) $778,232 $1,411,080

STEM-H Faculty Start-up Packages (ETF) 0 5,400,000

TOTAL $778,232 $6,811,080

Academic Division

College at Wise Operating Amendments FY2015-16 GF Request

Student Retention Management Intake Model $445,824

Compliance with Federal Mandates and SACS Requirements 286,942

TOTAL $732,766

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C O L E T T E S H E E H Y

V I C E P R E S I D E N T F O R M A N A G E M E N T A N D B U D G E T

AMENDED 2014-2020 STATE-

REQUIRED SIX-YEAR PLAN

S t a t e S i x - Ye a r P l a n T i m e l i n e

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October 2013 Submitted final 2014-20 plan to State

August 4 Submitted revised/updated plan to State

August 29 Received comments from the State

September 11 Action by Board of Visitors

October 1 Submit final revised plan to state

S t a t e S i x - Ye a r P l a n : A c a d e m i c D iv i s i o n O v e r v i e w

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• Advances objectives of the Higher Education Opportunity Act (HEOA, TJ-21)

• Enhances quality of education, research, and service

• Aligns with Cornerstone Plan

S t a t e S i x - Ye a r P l a n : A c a d e m i c D iv i s i o n P r i o r i t i e s

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• Enrollment Growth

• Faculty and Staff Compensation

• Faculty Start-up Packages

• AccessUVa

• Student Success: Total Advising, Student-Faculty Engagement, Technology-Enhanced Instruction, Veteran’s Consortium

• Research and Economic Development: Pan-University Priorities, Cancer Research, Economic Development Accelerator, Appalachian Prosperity Project

• Collaboration with the VCCS

• Efficiency and Continuous Improvement

S t a t e S i x - Ye a r P l a n : A c a d e m i c D iv i s i o n 2 0 1 4 U p d a t e s

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• No changes in priorities/strategies • Updated costs of some priorities

• Updates the 2014-2016 financial plan to reflect • FY2014-15 Board approved budget

• State approved General Fund appropriation

S i x - Ye a r P l a n : C o l l eg e a t W i s e O v e r v i e w

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• June 2013 – Chancellor and Senior Staff begin preparation of 2013 Six-Year Plan

• August 28, 2013 – 2013 Six-Year Plan review – State Council of Higher Education for Virginia (SCHEV)

• September 10, 2013 – 2013 Six-Year Plan approved by College Board Executive Committee

• September 20, 2013 – 2013 Six-Year Plan approved by Board of Visitors • August 4, 2014 – 2014 Revised Six-Year Plan submitted to SCHEV • August 8, 2014 – 2014 Revised Six-Year Plan approved by College Board

Executive Committee

2 0 1 4 S i x - Ye a r P l a n : C o l l eg e a t W i s e P r i o r i t i e s

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• Priority One – Retention and Graduation (new priority) • Priority Two – Federal Mandate: SACS-Clery-Title IX-VAWA

Compliance (new priority) • Priority Three – STEM Early College Academy • Priority Four – Early Alert Program for Identifying At-Risk Students • Priority Five – High Need Degrees • Priority Six – Science Consortium • Priority Seven – Appalachian Prosperity Project (APP) • Priority Eight - Improve K-12 Teaching and Learning Through the

Center for Teaching Excellence and Other Outreach • Priority Nine – Expand Scope of Summer Programs • Priority Ten – Undergraduate Research Initiatives

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2 0 1 4 - 2 0 1 6 F i n a n c i a l P l a n : C o l l eg e a t W i s e R e v i s i o n s

Revised Funding For: • Pilot non-residential STEM-Academy Program - Fall 2014 – Priority 3 • Launched Summer Bridge Program for first-time at-risk Students – fifteen

participants - fourteen Enrolling for Fall 2014 – Priority 4 • Healthy Appalachia Institute (HAI) Program Manager to support the Appalachian

Prosperity Project – Priority 7 • Increased T & R faculty wage for enhanced curriculum – Summer College –

Priority 9 • New funding to support undergraduate research – Priority 10 • Continue merit based salary increases for T & R Faculty

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CAPITAL PROJECT APPROVALS

C O L E T T E S H E E H Y

V I C E P R E S I D E N T F O R M A N A G E M E N T & B U D G E T

• Ten buildings housing 1,330 first year students and resident advisors

• Upgrade building systems, modernization and interior renewal, addition of 65 beds

• $85.8 – $104.7 million total cost • $18.2 million – Cash

• $67.6 - $86.5 million – Debt

P r o j e c t A p p r o v a l : M c C o r m i ck R o a d R e s i d e n c e H a l l R e n o v a t i o n

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• Built in 1984

• Houses 658 first-year students and resident advisors

• Modernization and interior renewal, conversion of single rooms to doubles, upgrade of building systems

• $25.0 – $32.0 million total cost • $9.4 - $12.0 million – Cash

• $15.6 - $20.0 million – Debt

P r o j e c t A p p r o v a l : G o o c h D i l l a r d R e s i d e n c e H a l l R e n o v a t i o n

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• Renovation and upgrade of 1st and 2nd floors

• New mechanical, electrical, and plumbing and life safety systems

• $10.0 - $13.0 million total cost from Hospital Operating Funds

P r o j e c t A p p r o v a l : O u t p a t i e n t S u r g e r y C e n t e r R e n o v a t i o n

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ADDITION TO THE 2014-2015

ANNUAL RENOVATION AND

INFRASTRUCTURE PLAN (ARIP)

C O L E T T E S H E E H Y

V I C E P R E S I D E N T F O R M A N A G E M E N T & B U D G E T

• Interior renovation of 2nd floor of Clemons Library

• Consolidate advising and academic support services for undergraduate students

• $3.2 - $4.0 million total cost

A R I P A d d i t i o n : C l e m o n s L i b r a r y

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PROPERTY TRANSACTIONS

C O L E T T E S H E E H Y

V I C E P R E S I D E N T F O R M A N A G E M E N T & B U D G E T

• Approximately 50 acre gift from Dr. Stanley Willis, 4 miles from College Campus

• Intended uses/benefits • Outdoor classroom • Expand opportunities for

learning and research in natural areas

• Science education and outreach activities through partnerships with local public schools

• Due diligence to be completed prior to finalizing acquisition

A c q u i s i t i o n o f W i l l i s P r o p e r t y i n W i s e , V i r g i n i a

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• Sale of property will provide funds to the Charitable Remainder Trust for the Thomas G. and Dorothy H. DeShazo estate • 148.29 acre site

• Trust benefits: • Research professorship at the

McIntire School of Commerce

• Library Fund

• Scholarship at the School of Nursing

D i s p o s i t i o n o f D e S h a z o P r o p e r t y i n C u l p e p e r a n d R a p p a h a n n o ck , V i r g i n i a

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PAT R I C K D . H O G AN

E X E C U T I V E V I C E P R E S I D E N T A N D C H I E F O P E R AT I N G O F F I C E R

ESTABLISHMENT OF QUASI-

ENDOWMENTS

E s t a b l i s h m e n t o f Q u a s i - E n d o w m e n t s

• Murray F. Nimmo Fund – To benefit the Albert and Shirley Small Special Collections Library, income will be used for the purchase, processing, cataloging, and preservation of books, manuscripts, and other material.

• Carol P. Buchanan Fund – To benefit the College at Wise, income will be used to fund the most critical needs as determined by the Chancellor.

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APPROVAL OF SIGNATORY

AUTHORITY FOR MEDICAL CENTER

PROCUREMENT OF FOOD AND

NUTRITION SERVICES

PAT R I C K D . H O G AN

E X E C U T I V E V I C E P R E S I D E N T A N D C H I E F O P E R AT I N G O F F I C E R

A p p r o v a l o f S i g n a t o r y A u t h o r i t y f o r M e d i c a l C e n t e r P r o c u r e m e n t o f F o o d

a n d N u t r i t i o n S e r v i c e s

• Medical Center partnered with VCU Health System on a cooperative

procurement across a number of strategic joint purchasing

collaborations.

• Finalizing contract to go into effect October 1, 2014, with a term of ten

years – an initial term of five years and a five-year renewal option.

• Total estimated contract value will exceed $70 million, with the value in

any single year exceeding $5 million.

• Delegates signatory authority to the EVP for Health Affairs to execute

this multi-year contract.

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M E L O D Y B I AN C H E T T O

A S S O C I AT E V I C E P R E S I D E N T F O R F I N A N C E

JUNE 30, 2014 ACADEMIC

DIVISION FINANCIAL REPORT

J u n e 3 0 , 2 0 1 4 A c a d e m i c D iv i s i o n F i n a n c i a l R e p o r t

• Unaudited, modified GAAP-basis Financial Statements, as compared to prior year

Statement of Net Assets

Statement of Revenues, Expenses, and Changes in Net Assets

• Cash-basis Operating Sources and Uses, actual results as compared to the budget plan.

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A c a d e m i c D i v i s i o n F i n a n c i a l R e p o r t M o d i f i e d G A A P - B a s i s F i n a n c i a l S t a t e m e n t ( U n a u d i t e d )

F i s c a l Y e a r 2 0 1 3 - 2 0 1 4

Year ending 6/30/14

Year ending 6/30/13

Balance Sheet Highlights: (in millions)

Net Assets $ 6,337 $ 5,615.8

Income Statement Highlights:

Net Tuition $ 448.2 $ 423.5

Grants & Contracts 257.6 304.2

State Appropriations 145.7 140.2

Gifts 146.1 146.9

Other 145.8 135.7

Operating Revenues 1,143.4 1,150.5

Operating Expenses 1,259.2 1,243.6

Net Operating Margin (115.8) (93.0)

Net Non-operating Contribution 836.9 563.6

Change in Net Assets $ 721.1 $ 470.6 35

(in millions) FY14 Budget FY14 Actual

Net Tuition and Fees $ 471.1 $ 472.5

Grants & Contracts 288.2 282.3

Endowment Distribution and Gifts 278.0 293.0

State Appropriations 145.5 145.7

Other 254.4 226.4

Sources of Funds 1,437.2 1,419.9

Instruction 368.6 335.3

Research and Public Service 310.1 300.7

Academic Support 145.4 137.7

Other Education and General 251.0 205.7

Financial Aid, Auxiliary, Debt, and Other 356.9 385.3

Uses of Funds 1,432.0 1,364.7

Net Sources in Excess of Uses $ 5.2 $ 55.2

A c a d e m i c D i v i s i o n F i n a n c i a l R e p o r t C a s h - B a s i s O p e r a t i n g S o u r c e s a n d U s e s , B u d g e t v s . A c t u a l

F i s c a l Y e a r 2 0 1 3 - 2 0 1 4

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A c a d e m i c D i v i s i o n F i n a n c i a l R e p o r t A r e a s o f F o c u s

• Operationalizing the University Financial Model

• Implementing recommendations of Finance Subcommittee

• Financing the Cornerstone Plan

• Addressing intergenerational change in faculty

• Developing multi-year financial plan

• Continuing to find operational efficiencies

• Developing new philanthropic relationships

• Growing and diversifying the research base

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S U S AN C AR K E E K

V I C E P R E S I D E N T A N D C H I E F H U M A N R E S O U R C E S O F F I C E R

UVA HEALTH PLAN

U Va H e a l t h P l a n E m p l o y e e E n r o l l m e n t

E n r o l l m e n t C o s t S a v i ng M e a s u r e s

In 2013, a dependent audit was conducted.

• Results: 6% of these dependents (1480) were removed saving nearly $2 million per year

In 2014, a “working spouse provision” was implemented, limiting coverage to spouses without access to affordable coverage providing“minimum value” from their own employer.

• Results: 30% of approx 6,000 spouses were removed (2,050), saving nearly $10 million per year.

U Va H e a l t h P l a n C o s t

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PAT R I C K D . H O G AN

E X E C U T I V E V I C E P R E S I D E N T A N D C H I E F O P E R AT I N G O F F I C E R

EXECUTIVE VICE PRESIDENT’S

REMARKS

E x e c u t iv e V i c e P r e s i d e n t ’ s R e m a r k s

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• Academic Division Contract for Dining Services

• State Budget Reductions

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2014-15 2015-16

General Fund budget reduction $6,532,891 $9,146,895

% of adjusted GF appropriation 5.00% 7.00%

% of GF and tuition 0.98% 1.34%

S t a t e B u d g e t R e d u c t i o n s : A c a d e m i c D i v i s i o n

S t a t e B u dg e t R e d u c t i o n s : A c a d e m i c D iv i s i o n S t r a t eg i e s

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• Continue energy conservation initiatives

• Implement strategic sourcing

• Identify turnover and vacancy savings

– Selectively fill vacant positions

• Reduce service duplication among central and schools

• Review low priority programs and activities for closure or reduction in scope

• Determine feasibility of moving College at Wise employees from the state health plan to the UVa Health Plan

S t a t e B u d g e t R e d u c t i o n s : C o l l e g e a t W i s e

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2014-15 2015-16

General Fund budget reduction $680,907 $953,427

% of adjusted GF appropriation 5.00% 7.00%

% of GF and tuition 3.31% 4.64%

S t a t e B u dg e t R e d u c t i o n s : C o l l eg e a t W i s e

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• Identify turnover and vacancy savings

– Selectively fill vacant positions

• Reduce facilities maintenance and housekeeping services

• Reduce non-personal services costs

– Computers and servers

– Training and staff development

– Vehicle replacement

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